N.M. Code R. § 15.1.8.15 – System of Internal Control Procedures for Licensees

A. Each licensee shall establish written administrative and accounting procedures for the purpose of verifying the licensee’s liability for taxes under the act and for the purpose of exercising effective control over the licensee’s internal financial affairs. The procedures shall be designed to satisfy the requirements, and include the provisions, set forth in Section 60-2E-35 of the act. In addition, the gaming operator licensee’s or applicant’s procedures shall meet the minimum standards established pursuant to board regulations.
B. The licensee shall not implement internal control procedures that do not satisfy the minimum standards unless the board, in its sole discretion, determines that the licensee’s proposed internal control procedures satisfy the requirements set forth in Section 60-2E-35 of the act and approves the proposed system in writing. Within 30 days after a licensee receives notice of such approval, the licensee shall comply with the approved procedures, amend its written procedures as necessary, and submit to the board a copy of the written procedures as amended and a written description of the variations from the minimum control standards. The licensee’s chief financial officer and either the licensee’s chief executive officer or a licensed owner shall sign the report.
C. Each racetrack licensee shall require its independent certified public accountant to submit to the licensee, on an annual basis, two copies of a written report analyzing the licensee’s compliance with approved procedures and minimum control standards. Using the criteria established by the board, the accountant shall report each event and procedure that the accountant believes does not satisfy the minimum standards or variations that have been approved by the board in writing pursuant to Subsection B of 15.1.8.15 NMAC. Not later than 120 days after the end of the licensee’s business year, the licensee shall submit to the board a copy of the accountant’s report and any other documentation relating to the licensee’s items of noncompliance noted by the accountant and describing the corrective measures taken.
D. Before adding any computerized system for monitoring gaming machines or any computerized associated equipment, the licensee shall do the following:
1. (1) amend its accounting and administrative procedures and internal controls to comply with the minimum standards;
2. (2) submit to the board a copy of the procedures as amended and a written description of the amended procedures signed by the licensee’s chief financial officer and either the licensee’s chief executive officer or a licensed owner;
3. (3) comply with any requirements imposed by the board regarding administrative approval of computerized gaming machine monitoring systems or associated equipment; and
4. (4) after complying with Paragraph (1) of Subsection D of 15.1.8.15 NMAC through Paragraph (3) of Subsection D of 15.1.8.15 NMAC above, implement the procedures as amended.
E. If the board determines at any time that the licensee’s administrative or accounting procedures do not comply with the requirements of this section, or the licensee is out of compliance with the approved minimum internal controls, the board shall notify the licensee in writing. Within 30 days after the date of such notice, the licensee shall amend its procedures accordingly, submit a copy of the amended procedures, and provide, in writing, a description of any remedial measures taken.
[12/31/98; 15.1.8.15 NMAC - Rn & A, 15 NMAC 1.8.15, 10/15/00; A, 12/28/01; A, 2/28/05; A, 6/30/08]